COMMERCIAL farmers in Scotland have seen their income increase by 94 per cent over the past year, according to figures from the country’s chief statistician.

In his report, Roger Halliday said the findings reversed the decline from the previous year and saw incomes recovering to 2014 levels.

He said average farm business income (FBI) had risen by around £12,800 to £26,400, which showed the industry had regained some of the decline since 2011. Farm income had decreased 46 per cent (£22,900) in real terms up until last year.

However, the National Farmers Union (NFU) Scotland warned that the figures illustrated why financial support payments would have to continue.

The union’s chief executive, Scott Walker, said: “There are two key messages that should be taken from the figures that have been published on farm incomes.

“The first is that 45 per cent of farms in the survey are not able to pay the farmer, spouse and other working family members a rate of pay equal to the minimum agricultural wage.

“The second is that without the financial support payments these farms receive they would make a loss. Until we can address the inequalities in the supply chain Government support for the industry remains essential and must not be threatened due to Brexit.”

The latest figures are based on annual audits of nearly 500 commercial farms in Scotland – the Farm Business Survey (FBS) – which collects a range of data on farms’ financial health using their accounts. This report focused on the 2016 crop year.

Data is used to estimate the total income for unpaid labour, such as farmers and their spouses, who rely on the farm’s income.

The survey only collects data on farms which are eligible for subsidies and does not include data from small farms or sectors such as pig and poultry farming, which do not receive additional funding.

It showed that incomes from 45 per cent of farm businesses polled would not have been enough to meet the legal minimum agricultural wage (£7.50 per hour) for unpaid labour, which included farmers, spouses and business partners.

There was an average increase in income across all farms in the survey, which categorised them into eight types – such as dairy or crop farms and those in less favourable conditions for growing crops and holding livestock.

General cropping farms had the highest average income for 2016-17 at £47,100, up around £15,700 from the previous year.

Dairy farms saw the largest increase in average income, because of a decrease in inputs and a recovery in the value of dairy cattle.

Income from milk remained steady from the previous year due to the its price remaining at around 21p per litre for farms in the survey.

The survey showed the average net worth of Scottish farm businesses was £1.3 million.

Their balance sheets revealed that farm businesses are capital intensive and typically had high asset values which were not included in income measures. Average debt levels were said to be fairly low with liabilities equal to ten per cent of the value of assets.

Walker added: “We have the ambition to double the size of the food and drinks sector in Scotland by 2030 but if all are to benefit from this we will need to radically rethink the supply chain so that the hard work of farmers and their families is valued, and that a fair sustainable price is paid for what they produce.”